Many philatelists resort to bidding on eBay and/or other online forums at some point to add on to their collection. For a novice, to avoid getting fleeced it is best to be familiar with the terms used as well as with the tactics employed by both dealers and bidders. This post focuses on how to bid successfully on eBay lots while steering clear of the gotchas.

The following guidelines can be handy when purchasing stamps on eBay:

Buy It Now: Touted as the no-hassle way to buy something on eBay, availing of this option is unfortunately the most expensive way to purchase from eBay. For a small percentage of eBay lots, the Seller sets a sale price (Buy It Now price). To buy the item bypassing the bidding process, all that needs to be done is to use the ‘Buy It Now’ button and pay the asking price.

Buy it Now or Best Offer: This is a variation of ‘Buy It Now’ but with a little spin - the buyer can provide a counter-offer stating the amount he is willing to pay for the item. The seller can choose to either accept the highest offer or list the item again. Again, the buyer is at a disadvantage as there are no guarantees on getting the item even if one is the highest bidder.

Reserve vs. No Reserve: Certain lots on eBay have a reserve price indicating the seller’s unwillingness to part with an item below a certain price. The reserve price is not published, but once a bid goes above the reserve price, the listing will reflect that the reserve has been met. This is one way sellers protect themselves against low-ball winning bidders.

Free Shipping: This is an incentive from the seller’s part but is usually limited to local (within the same country) shipping.

Watching Items and History Search: It is good strategy to research items of interest before actually bidding on them. Any item on eBay can be placed on one’s watch list. Carefully analyzing the bidding history for items in the watch list can position one better when it comes to placing a bid. Another approach to track similar lots on eBay is to search for the item using the ‘Advanced Search’ option and then selecting the ‘Completed Listings’ check box. This will provide a result set of the price realized for completed auctions of the searched term.

Bidding Strategies: Employing proxy bidding is the best overall strategy for eBay stamp lots. The strategy involves bidding with the maximum price you are willing to pay for and the high bid will be listed as one increment over the existing high-bid or the starting price whichever is higher – Proxy bids happen automatically until your maximum bid is reached as others bid on the same item. This strategy helps avoid several pitfalls: a) Shill bidding – an illegitimate strategy used by sellers to artificially inflate the price of a listing by self-bidding by means of a separate ID or similar tactic, b) Bid Shielding – another illegitimate strategy where three or more IDs are used – the first places a low ball bid while the others place artificially high bids. The high bids are retracted just before the end of the auction, leaving the low-ball bid as the winning bid, c) Sniping– a proxy bid placed seconds before the end of an auction. This is a legitimate strategy although some consider it unfair. There are online services like gixen.com that automates sniping for you, and d) Incremental Low-Balling – a legitimate strategy used mostly by greenhorn eBayers whereby they bid just enough to lead the auction but continue doing so every time they get outbid. A variation of the same is when experienced buyers do incremental bidding but with bigger chunks to discourage incremental low-balling.

Dealer Strategies: Since buyers do not see the item physically, the bid is based on the Images, Title, Description, and Quality rating. Alas, technology favors the dealer – it helps enhance desirability by disguising the true nature of the item. Carefully consider the feedback of sellers to alleviate potential problems.

High-values: This just implies that the face value of stamps when purchased from the post-office is high. For Used stamps, having this description does not enhance the value of the listing and so categorizing them as ‘High-Value’ is deceitful. In contrast, for MNH listings, this is useful information.

Re-listings: These happen when buyers do not honor their end of the bargain; mostly it is failing to pay for the items they bought.

Second-Bid Offers: These are offers from eBay sellers soliciting you to buy the item as the owner of the second-highest bid because the highest bidder backed off. It is illegitimate to do so per eBay rules and chances are high for the solicitation to be a scam.

Retracting: For certain special circumstances eBay permits retracting a bid. But, this option should be avoided as far as possible and the onus is on the buyer to perform due diligence on EVERYTHING before placing a bid.

In general, being aware of strategies used to gain an advantage in the bidding process and having a clear-cut proxy bidding strategy should help avoid paying more for items you want to bid. We still recall our misery when our winning bid on one pound of High-values turned out to include nothing other than used $1 stamps and that too the same stamp.

Update: Stamps shipping from China now have very modest shipping charges as there is a shipping agreement between eBay and the postal services of USA & China. This is something to be aware of when bidding for lots shipping from China.